EUR/USD outlook: Bears regain control after bulls got trapped at pivotal Fibo barrier
|EUR/USD
The Euro returned to red in early Thursday’s trading and has already retraced a half of Wednesday’s 1.5% recovery rally, after traders reacted on oversold conditions.
It seems that bounce was short-lived, as recovery repeatedly failed to clearly break above pivotal Fibo barrier at 0.9732 (Fibo 38.2% of 0.0050/0.9535 bear-leg), generating an initial signal of a bull trap.
Bearish daily studies support the action, allowing limited price adjustments on oversold conditions and complementing strongly Euro-negative fundamentals.
Today’s close below broken Fibo 23.6% at 0.9657 would confirm that bears regained control and open way for retesting new 20-year low at 0.9535, violation of which would risk drop towards psychological 0.90 support.
However, long-legged Doji candle is forming on weekly chart and suggesting that bears may take an extended breather before resuming larger downtrend.
Fibo level at 0.9732 marks solid resistance which should keep the upside protected and guard pivotal barrier at 0.9793 (50% retracement / falling 10DMA).
Res: 0.9732; 0.9750; 0.9793; 0.9812.
Sup: 0.9635; 0.9600; 0.9569; 0.9535.
Interested in EUR/USD technicals? Check out the key levels
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.